Gold prices in Dubai could hit Dh550 per gram; market experts warn of wild swings

26/10/2025 02:59 AST

Jewellers and analysts remain optimistic about gold's outlook in the UAE, especially in Dubai, predicting that 24K could reach Dh550 per gram in the coming months.

However, they also issued a word of caution about wild swings in the precious metal prices in the months ahead due to the volatile geopolitical situation and trade wars.

After touching a record high of Dh525 per gram earlier this month, prices have dropped due to profit-taking, as 24K was trading at Dh494.75 per gram on October 24.

"Despite the sudden dip, market experts remain cautiously optimistic about gold's trajectory. The fundamentals, like central bank purchases, strong Asian demand, and ongoing geopolitical tension, still support long-term bullishness.

"We expect gold to trade between Dh485 and Dh525 per gram in the next quarter, with a potential rebound toward Dh540-Dh550 by early 2026 if US interest rate cuts materialise and global tensions persist. In short, this phase offers a short-term buying opportunity rather than a reason to panic," said Varun Bafna, co-founder of Amari Capital.

Drop in gold prices
On Friday (October 24), the Dubai Jewellery Group data showed 24K, 22K, 21K and 18K trading at Dh494.75, Dh458, Dh439 and Dh376.5 per gram, respectively, in Dubai. Spot gold was trading at $4,106 per ounce.

Anuraag Sinha, managing director of Liali Jewellery, said the recent drop in gold prices appeared to be partially due to overdue profit-taking, and also reflected a combination of other market dynamics.

"If global inflation remains elevated or central-bank policy remains uncertain, gold may retain structural support as a hedge. Any renewed geopolitical or macro-economic stress - trade risks, debt concerns, currency weakness - could again boost safe-haven flows. If the US dollar weakens further or US rate-cut expectations regain traction, gold could regain upward momentum," said Sinha.

Gold has delivered an eye-watering rally this year, rising over 60 per cent year-to-date even after factoring in the recent decline. A combination of macroeconomic, fundamental, and geopolitical forces drove this surge. The US President Donald Trump's ever-fluctuating tariff policies, ongoing geopolitical tensions, strong central bank purchases, and gold's appeal as a portfolio diversifier were key catalysts.

Signs of an overstretched rally
"Technical indicators were flashing warning signs of an overstretched rally since early September; therefore, some profit-booking was inevitable. Moreover, the recent softening of geopolitical tensions after Israel and Hamas agreed to the first leg of a peace deal also eased haven demand. Furthermore, Trump signaled a willingness to negotiate with China and India to ease trade tensions with the US. As a result, a retreat in gold prices was bound to happen," said Vijay Valecha, chief investment officer, Century Financial.

Although spot market volatility has eased, Valecha sees the one-month implied volatility has increased substantially to the highest level since March 2022.

"This indicates that investors are readying themselves for wild swings in either direction. The general consensus is for consolidation or further pullbacks in the near term, which may not necessarily negate the broader bull run, rather than a free-fall in prices.

"If gold drops below $4,000 an ounce, we can brace ourselves for a bigger capitulation. However, both central banks and private capital continue to accumulate bullion, contributing to its stellar demand. With inflation still running above the Fed's two per cent target and expectations of interest rate cuts in the US, the long-term factors supporting gold remain sturdy as of now," he concluded.

Khaleej Times